The International Monetary Fund (IMF) delegation to Bulgaria will discuss with the Bulgarian National Bank the need for limits on household credit. Outgoing IMF mission head for Bulgaria Hans Flickenschield confirmed such measures would be requested. The delegation arrived on Wednesday for a one-week visit that will conclude the revision of the two-year agreement signed between the IMF and Bulgaria, Dnevnik newspaper reported.
Credit limitation is needed due to the worsening trade deficit. According to expert estimates, the deficit will reach 14.5 to 15 per cent of GDP for 2005. The IMF believes credit is the main reason for the negative development. Restrictions would be needed to ensure the stability of the national bank system, Flickenschield said. A limitation project was implemented in Romania and is producing positive results, the mission head said.
Flickenschield also confirmed the IMF would demand tighter control over duty-free shops. Such shops will be permitted to function only on the territory of airports, which is the practice in most European countries.